The second day of the Moscow Financial Forum opened with a plenary session that had a Conversation with First Deputy Prime Minister of the Russian Federation — Minister of Finance of the Russian Federation Anton Siluanov and Mayor of Moscow Sergey Sobyanin, and the Forum guests.

The dialogue between the First Deputy Prime Minister and Minister of Finance and the Mayor of Moscow continued the trending topics that were largely covered by pubic officials, business representatives and international experts on economy and finance on September 6, the first day of the Forum. In particular, Anton Siluanov addressed the national projects that comply with the development purposes specified in the Executive Order signed by the President in May. The Minister noted, “The national projects have a more consistent structure with higher requirements. This was not the case with the state programmes; the goal setting was less clear. We are setting up a special system for monitoring the implementation across all targets and measures within the national projects. It is scheduled to launch next year.”

According to Siluanov, the next three-year budgeting cycle will see the implementation of the Executive Orders signed by the President in May, including higher productivity of labour, economic growth, higher quality of education, health care and pensions.

“We have been dealing with payroll rather than economic tasks over the recent years. I mean we were mainly focused on social issues. For this reason we were only able to comply with the executive orders regarding salaries but, unfortunately, we failed in terms of creating new jobs,” emphasized the Minister.

Mayor of Moscow Sergey Sobyanin noted, “Increasing civil servants’ salaries is much easier than increasing economic growth, and highly productive jobs are in direct correlation with economic growth. If we only focus on salaries, we will exhaust our sources of funds someday.”

First Deputy Prime Minister of the Russian Federation — Minister of Finance of the Russian Federation Anton Siluanov and Mayor of Moscow Sergey Sobyanin also discussed business and entrepreneurs’ investment in the national economy. Anton Siluanov emphasized: “A sufficiently stable rouble allowed businesses to have better earnings. Our goal is to create an environment where businesses are interested in investing in Russian economy rather than in foreign assets. Our communication with business used to be poor. Businesses do not trust us; they believe that we can take away their earnings through taxes. Understanding what we do and what we plan to do is very important. Our task is to help entrepreneurs in creating successful businesses in Russia.”

Mayor of Moscow Sergey Sobyanin told about the capital city’s experience in stimulating investment in the economy, “Capital investment has increased by 70% in Moscow over the recent eight years. We keep working with investors; we even have an Entrepreneurship Protection Office. Our dialogue with business is tough but fair. We have reoriented investment to other parts of the city and allocated them for the benefit of both the city, and businesses.

Anton Siluanov continued on the subject of urban agglomerations that was widely debated by the public officials and experts on September 6, the first day of the Forum. The Minister highlighted, “The main economic growth drivers are in agglomerations around big cities. They are the places where we see the highest growth rates: they create an environment and infrastructure for business development.”

Anton Siluanov also said that the authorities must keep in mind other areas of the country as well. “We have rural areas, we have areas with an insufficient economic basis but they also create jobs. Things have to be balanced. On the one hand, we are going to focus on agglomerations, on the other hand, we will support the development of the regions that are not covered by agglomeration centres under the strategy of spatial development: we’ll build roads, invest in social infrastructure,” highlighted the Minister of Finance.

The Minister of Finance and the Mayor of the capital city discussed the issue of providing support to the regions. “They say: if Moscow has high incomes, then the other regions suffer from it. However, 60% of what goes to the budget of Moscow is transferred to the federal budget, the latter being the main beneficiary. We need an ideology that enables us to plan the development of the city and its economy with the economic growth causing higher deductions to the federal budget that will be able to support the other regions. It turns out that we support the development of the other Russian regions without stopping the development,” said Sergey Sobyanin.

Addressing this subject, Anton Siluanov also covered the tax issue, “Why should we centralize the 1% income tax? We collect this tax to the federal budget and distribute it to the regions that need federal support. Our regions differ a lot in terms of the income base, some income bases are dozens of times larger than others. There are few regions whose income is comparable to that of Moscow’s. There are regions without their own resource base but, say, with people who need medical treatment. The state has to take care of all its citizens, and we collect this 1% of income tax to help those regions that do not have their own resource base.”

To recap, the business programme of the second day of the Moscow Financial Forum has 13 events of different formats on its schedule. The subject of the forum this year is “Finances for Development: A New Platform for Stable and Balanced Relationships.”